AMP Capital Wholesale Australian Bond Fund

Income generation and defence for investors with exposure to growth assets

The Wholesale Australian Bond Fund was developed for wholesale investors seeking access to a blend of quality fixed income assets. The Fund is focused primarily on Commonwealth and semi-government bonds but also allocates to investment grade credit sectors, cash and cash-like securities and issuers across a range of industries.

"We’ve implemented a set of procedures to score issuer fundamental, technical and valuation components. This is then aggregated at sector level to help drive our industry outlook and opinion."Simon Warner, Global Chief Investment Officer, Fixed Income

A fund built with these goals in mind

Tends to provide defence to a portfolio when growth assets are providing negative returns

A well-diversified, actively managed bond fund is an important diversifier to an investor with an allocation to growth assets.

Aims to limit the risk of capital loss by actively managing duration

If we expect bond prices to fall, we would normally look to ‘shorten’ the portfolio’s duration by buying shorter-term bonds and selling longer-term bonds.

Aims to deliver a stable income stream

Exposure via a well-diversified combination of government and semi-government bonds and also investment grade rated corporate bonds.

Capitalise on high quality debt of Australian Government and corporates

Australia has a ‘AAA’ credit rating from all three of the main credit rating agencies; the majority of corporate bonds held are investment grade rated.

How does this fund fit into your portfolio?

The fund is designed for investors seeking an an investment which provides the potential for sustainable income and capital growth over the long term. It can be used to complement existing solutions in a blended portfolio or it can be used individually. When used with existing solutions, the fund fits within the defensive component of an investor’s overall portfolio.

How do we add value?

For our active bond portfolios, we identify value and manage risk through an investment approach that combines interest rate and credit-specific research.

This approach includes three key elements:

Interest rate process
This combines a robust quantitative framework with market analysis to develop strategies in duration and curve.

Credit investment style
This combines a top-down approach with bottom-up credit analysis. Our top down research focuses on global credit spreads in key credit sectors, while our bottom-up research is focused on a global industry basis.

Risk management
We manage risk at a fund level by monitoring and controlling three key sources of bond risk/return – credit exposure, duration and yield curve risk. Risk management and risk budgets are a key focus of our management style.

What are the risks?

The key risks of the Fund relate to interest rates, credit and derivatives. Interest rate risk is the risk of capital loss in a rising interest rate environment. Credit risk is where a credit issuer or counterparty defaults on interest payments, the repayment of capital or both. In addition, the Fund may invest in derivatives. These carry the risk of default by the counterparty, and losses may be magnified and their valuation may not move in line with the underlying asset.

Risks of the Fund may include or be associated with: companies, counterparty or default risk, gearing, international investments, investment management, liquidity, listed hybrid securities, sector, share market investments and sovereign default risk. Before choosing to invest in the Fund, investors should read the Product Disclosure Statement and Incorporated Information, and consider factors such as the likely investment return, the risks of investing and their investment timeframe.

Fund facts

How to invest

Direct Investment

The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (assigned June 2017) referred to in this document is limited to “General Advice” (as defined by the Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Zenith usually charges the product issuer, fund manager or a related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on Zeniths' Product Assessment’s at: http://www.zenithpartners.com.au/RegulatoryGuidelines

The Professional Planner | Zenith Fund Awards are determined using proprietary methodologies. Fund Awards were issued October 9, 2015 and are solely statements of opinion and do not represent recommendations to purchase, hold, or sell any securities or make any other investment decisions. Ratings are subject to change.

The Professional Planner | Zenith Fund Awards are determined using proprietary methodologies. Fund Awards were issued October 7, 2016 and are solely statements of opinion and do not represent recommendations to purchase, hold or sell any securities or make any other investment decisions. Fund Awards are current for 12 months from the date awarded and are subject to change at any time. Fund Awards for previous years are referenced for historical purposes only.

AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) (AMPCFM) is the responsible entity of the AMP Capital Wholesale Australian Bond (Fund) and the issuer of the units in the Fund. To invest in the Fund, investors will need to obtain the current Product Disclosure Statement (PDS) from AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232 497) (AMP Capital). The PDS contains important information about investing in the Fund and it is important that investors read the PDS before making a decision about whether to acquire, or continue to hold or dispose of units in the Fund. Neither AMP Capital, AMPCFM nor any other company in the AMP Group guarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this information. Past performance is not a reliable indicator of future performance. While every care has been taken in the preparation of this information, AMP Capital makes no representation or warranty as to the accuracy or completeness of any statement in it including without limitation, any forecasts. This content has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. Investors should, before making any investment decisions, consider the appropriateness of this information, and seek professional advice, having regard to their objectives, financial situation and needs.